The market sentiment improves further (Daily analysis 16.03.2021)

16 Mar 2021 8:50|Bartosz Sawicki

The equity markets seem to have already accustomed themselves to higher US Treasuries yields. Dow Jones Industrial Average secured a fourth consecutive all-time highs finish on Monday; even vulnerable to higher financing costs tech stocks edged higher.

The US dollar remains supported yet is unable to post new gains. The EUR/USD pair trades a tad above the 1.19 handle, and some may argue that a local low was posted last week when the main currency pair bounced higher from the crucial 200-day moving average area. At the beginning of the week, the pound sterling is the main underperformer. The British currency has recently lost some of its appeals as the vaccination process's relative progress lost momentum. Secondly, some tensions with the European Commission resurfaced as headlines that the EU will begin legal action against the UK over a "Brexit deal violation" had emerged. We perceive this jittery as a substitute of a broader trend as the markets await key events of the week: today's US retail sales numbers and the Federal Reserve meeting scheduled for March 17th.

Currency commodities withstand the US dollar strength

In the year to date terms, the only currencies excluding the pound sterling which are able to withstand the US dollar strength are those characterized by the strongest connections to the commodities markets: above all the Norwegian krone, the Canadian dollar but also the Antipodean currencies. The Japanese yen and the Swiss franc have so far suffered the heaviest losses due to their low-yield status and vulnerability to debt sell-off combined with expectations of a roaring economic growth and the resurgence of inflationary pressures.


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This commentary is not a recommendation within the meaning of Regulation of the Minister of Finance of 19 October 2005. It has been prepared for information purposes only and should not serve as a basis for making any investment decisions. Neither the author nor the publisher can be held liable for investment decisions made on the basis of information contained in this commentary. Copying or duplicating this report without acknowledgement of the source is prohibited.

See also:

12 Mar 2021 8:50

A week of retreat from the dollar (Daily analysis 12.03.2021)

11 Mar 2021 9:36

Disappointment regarding inflation cools the dollar and debt markets (Daily analysis 11.03.2021)

10 Mar 2021 9:19

A pause in the greenback’s advance (Daily analysis 10.03.2021)

9 Mar 2021 9:00

The dollar's rally may be running out of steam (Daily analysis 9.03.2021)

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